2018/07/03/(Tue)

DHL CARE Awards: three major air carriers distinguished at the Life Science and Healthcare Conference [Integrator]

Lufthansa Cargo & Swiss WorldCargo, Emirates SkyCargo and Cathay Pacific Cargo recognized as industry leaders in transport of temperature-sensitive life sciences products by DHLDHL's own Thermonet air freight service now includes more than 30 IATA CEIV certified network stations for vital medical productsBonn - DHL Global Forwarding, the air and ocean freight specialist of Deutsche Post DHL Group, has awarded the 2018 Carrier Award for Reliability and Excellence (CARE) to Lufthansa Cargo & Swiss WorldCargo, Emirates SkyCargo, and Cathay Pacific Cargo. The CARE Awards recognize the industry's top transporters of temperature-sensitive life sciences products. The winners were distinguished at the 18th Life Science and Healthcare Conference held at Lake Maggiore, Italy on June 28, 2018.

"The transport of medical products and medications is an especially demanding undertaking - at DHL, we care about making sure these sensitive products avoid temperature excursions, remain in the right conditions and arrive safely and timely to their patient's hands," said Scott Allison, President, Life Sciences & Healthcare, at DHL. "These are life-saving products, and customers are increasingly demanding faster delivery with a higher level of transparency at the same time. The volume of products is also on the rise, thanks to the growing online pharmaceutical business. Air freight carriers see these challenges as opportunities, responding with increased investments to improve both the quality and visibility of transport."

Recipients of the DHL CARE Award, which was first instituted in 2016, offer exceptional service, quality, ground handling and innovative technologies and processes for their shipments. In the end, the differences in top scores were extremely close, underlining the high level of expertise and service quality provided by the laureates. This year's award was presented by Thomas George, CEO DHL Global Forwarding Europe, at a festive ceremony in the course of the 18th Life Science and Healthcare Conference.

As carriers strive to provide best-in-class services in the life sciences and healthcare sector, they increasingly invest in improvements. Good Distribution Practices (GDP) certifications based on the European Union guidelines on how to best handle medicinal products, as well as the Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) of the International Air Transport Association (IATA) have increased in the last year.

"What stands out even more this year is the fact that the fundamental service levels of our preferred carrier partners have increased universally while the DHL CARE Award winners managed to score higher on data transparency, extreme ambient temperature avoidance and investment in innovation such as real-time shipment monitoring," said David Bang, CEO LifeConEx/Global Head of DHL Temperature Management Solutions.

With Thermonet, DHL's own temperature controlled air freight service for the Life Sciences and Healthcare sector, the Group delivers regulatory compliance and higher visibility throughout its own international network of GDP-certified life sciences stations for air and ocean freight. DHL began seeking certification for these stations by the IATA CEIV Pharma in 2016. Since then, over 30 stations have been CEIV Pharma certified, following successful employee training courses and third-party audits. DHL provides forward-thinking, intelligent healthcare logistics through a broad, holistic range of patient-centric solutions. With focus on connecting, caring, complying and innovating, DHL delivers excellence to the healthcare industry.

Deutsche Post DHL Group has today decided on a suite of measures to sustainably secure the further earnings growth in the PeP division. To counteract the decline in profitability in the Post - eCommerce - Parcel (PeP) division, which became evident in the first quarter of 2018, the Group decided on a range of measures to safeguard a positive earnings development in 2019 and 2020. The measures mainly target further improvement in productivity, indirect cost and yield management in the Post and Parcel business.

"We are fully focused on achieving our strategic and financial targets for 2020 and on positioning our business divisions for success in future years. In order to deliver long-term sustainable growth, we are now consciously accepting short-term negative effects on our earnings", said Frank Appel, CEO Deutsche Post DHL Group.

As communicated in the first quarter, the structural shift from Post to Parcel resulted in a number of challenges in 2018. In Parcel Germany, the division sees unchanged structural volume growth, but costs inflated with more FTEs and transport capacities needed in unusually tight labor and transport markets. The challenge for Post is the unchanged structural volume decline with stable stamp prices since January 2016 and a high fixed cost base. Additionally, the structural shift with mail decline and parcel growth is currently not adequately reflected in the overhead cost of the division, and the investment into the further development of operations in PeP Germany has not been sufficient over the last years.

Program to ensure long-term earnings growth of the PeP-divisionIn order to address these challenges, the Group has initiated a comprehensive program to improve productivity, reduce indirect costs and implement yield initiatives.

Productivity: To increase productivity, the Group will lift PeP operations onto the next S-curve through regular opex investments of EUR 100 - 150 million annually. This will include automation and digitalization, continuous improvement, increased last mile productivity and intelligent network utilization. Ultimately, these operational investments will drive better customer service and higher efficiencies, which will lead to an improvement of EUR 150 - 250 million per annum.

Indirect Cost Reduction: In order to reflect the continuous decline in letter volumes, the Group will sustainably reduce the fixed cost base mainly with an early retirement program focusing on civil servants in overhead areas. This will come with restructuring costs of EUR 500 million in 2018 and will be implemented in 2018 and 2019. The Group expects the program to lead to an annual cost reduction of at least EUR 200 million by 2020.

Yield Management: For regulated products in Post, the Group is awaiting the new regulation from the Federal Network Agency as of January 1, 2019. Price increases for unregulated larger-size shipments as of July 1 have already been announced. In Parcel Germany, the Group will focus on a balance between growth and yield. Even in a competitive market, cost inflation requires price adjustments, which will be implemented on a rolling basis upon contract renewal and signing. The future volume growth for Parcel Germany is expected to be closer to the market development of 5 - 7 percent growth.

The measures will only help in part in 2018; therefore, the PeP-EBIT prior to one-off cost is now expected to come in at around EUR 1.1 billion. This includes additional operating expenses for productivity improvements of around EUR 150 million. In addition, a restructuring charge of EUR 0.5 billion will be recognized in 2018 to implement measures.

Starting in the second quarter of 2018 the activities of the recently founded area of Corporate Incubations will be shown as part of the new line Corporate Functions together with Corporate Center/Other. The full-year result of Corporate Incubations is expected to be EUR -70 million.

Including the above described effects, the management board expects in 2018 an EBIT of around EUR 3.2 billion. The PeP division is likely to contribute at around EUR 0.6 billion to this figure while the DHL divisions are still expected to reach around EUR 3.0 billion. The Corporate Functions result is expected to be at EUR -0.42 billion, including the unchanged projection for Corporate Center/Others of a result of around EUR -0.35 billion.

The above mentioned measures result in a confirmed earnings forecast for 2020: Group EBIT is expected to reach more than EUR 5.0 billion. The PeP division is expected to contribute around EUR 1.7 billion of this and the earnings contribution of the DHL divisions is forecasted to reach around EUR 3.7 billion. Corporate Functions is forecast to reach around EUR -0.35 billion.

The reported Group Free Cash Flow for the full year 2018 - excluding the debt-financed renewal of the Express intercontinental aircraft fleet - is hence expected to exceed a minimum of EUR 1.0 billion.

2018/06/04/(Mon)

DHL Innovation Center in Chicago will spearhead development of future logistics and supply chain solutions in the Americas regionState-of-the-art facility to open its doors to customers and partners summer 2019 providing an inspiring and interactive visitor experienceDHL is shaping the future of logistics, working on the technologies to drive customer-centric innovation

DHL will expand its global innovation footprint to the Americas region by breaking ground for its new Americas Innovation Center in Rosemont, Illinois, which will offer unique insights into the future of logistics. Joining the DHL Innovation Center in Troisdorf, Germany, and the Asia Pacific Innovation Center in Singapore, the Americas Innovation Center will exhibit the technologies and innovations in logistics that DHL is already implementing across the region, and will foster the development of future logistics and supply chain solutions while serving as a regional platform for collaborative innovation. The opening is planned for summer 2019.

"With our third Innovation Center worldwide, we will be able to create a platform for research and collaborative innovation between DHL customers, start-ups, academia, industry partners, and innovation experts in the Americas region," commented Matthias Heutger, SVP, Global Head of Innovation & Commercial Development at DHL. "This visionary innovation center will further promote and nurture our worldwide leading position as the logistics innovation frontrunner in one of our key markets. It will also help us to further build on successful partnerships that we have established with technology leaders and innovative start-ups in the region."

DHL's logistic innovations footprint in the AmericasAs a global leader in logistics, DHL continuously evaluates its innovative customer-centric solutions, already implementing advanced technologies in all of its operations to boost productivity and serve the evolving needs of customers.

DHL Supply Chain, the contract logistics specialist within Deutsche Post DHL Group, has seen average productivity increases of 15 percent in trials of augmented reality technology in warehouses, with smart glasses that provide visual displays of order picking instructions and item locations. It has also deployed drones with surveillance cameras to ramp up security at warehousing sites in Brazil and Mexico.

Robotics, ranked the most important physical technology with 63 percent in a recent global survey by DHL of about 350 supply chain and operations professionals, also play a significant role in DHL's innovation activities. DHL Supply Chain uses collaborative robots designed to help with repetitive and precise tasks, such as picking and packing, in a number of its North American warehouses.

DHL Global Forwarding, the leading specialist in air and ocean transport, and DHL Express, the world's leading international express delivery company, also use virtual reality and artificial intelligence in countries like the United States and Chile for employee training programs and to optimize customer service.

Visions, Trends, Solutions - A physical representation of innovation in logisticsThe new Americas Innovation Center will house DHL's logistic innovations and robotics, and will offer customers and partners a peek into the future of logistics, showcasing visions of what the world and its transport infrastructure might look like in 2050, as well as the latest technology trends in robotics and automation, artificial intelligence, self-driving vehicles, the Internet of Things, and virtual reality - all of which are already being tested or implemented by the Group.

"Rosemont is a central destination for businesses to meet and connect thanks to our strategic location between Chicago O'Hare International Airport and the City of Chicago, and we're thrilled to have DHL mark our Village as a new destination for technology and innovation," said Rosemont Mayor Brad Stephens. "Companies look for ideas on the newest trends in this digital era, and now they can come here to look into the future of logistics."

On a surface area of 24,000 square feet, the state-of-the-art facility can host trend and innovation events for up to 300 guests with high-tech features, futuristic designs, an impressive foyer and inspiring meeting spaces that will be available to the public.

"Inspire, connect and engage - these are the main goals we pursue with our innovation centers. While inspiring our visitors in a unique environment and connecting them with logistics and innovation experts, we aim to support strategic customer engagement that has the potential to create new business and leverage thought leadership to explore the different ways in which technological development can benefit DHL and our customers in the future. Our new Americas Innovation Center - in close proximity to some of the world's most dynamic technology and innovation hubs - will help us to shape the future of logistics," added Heutger.